Pacific International Securities Inc. v. Drake Capital Securities Inc. et al., 2000 BCCA 632

• Judge: Esson, Mackenzie and Proudfoot, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: November 06, 2000
• Jurisdiction: British Columbia
• Citations: 2000 BCCA 632;(2000), 145 B.C.A.C. 221 (CA)

Pacific Intl. v. Drake Capital (2000), 145 B.C.A.C. 221 (CA);

    237 W.A.C. 221

MLB headnote and full text

Temp. Cite: [2001] B.C.A.C. TBEd. JA.015

Pacific International Securities Inc. (plaintiff/respondent/appellant by cross-appeal) v. Drake Capital Securities Inc., Painewebber Incorporated and Correspondent Services Corporation (defendants/appellants/respondents by cross-appeal)

(CA026442; 2000 BCCA 632)

Indexed As: Pacific International Securities Inc. v. Drake Capital Securities Inc. et al.

British Columbia Court of Appeal

Esson, Mackenzie and Proudfoot, JJ.A.

November 23, 2000.

Summary:

The plaintiff was a British Columbia company. The defendants were United States companies which did not carry on business in Canada. The plaintiff sued the defendants for breach of a contract for the purchase of shares of a company. The plaintiff served the originating process on the defendants outside of British Columbia pursuant to rule 13(1)(g) of the Rules of Court. The defendants applied for an order that service of the writ of summons and statement of claim was invalid because the British Columbia Supreme Court did not have jurisdiction over the matter. The defendants submitted that any breach of contract occurred outside of British Columbia and that there was not a real and substantial connection between the action and British Columbia. Alternatively, the defendants sought an order that the court decline jurisdiction because it was not forum conveniens. The plaintiff claimed the right to serve the pleadings on the defendants outside of British Columbia pursuant to rule 13(1)(g) because the proceeding was in respect of a breach of contract in British Columbia of a contract wherever made. Alternatively, if service of the pleadings was declared invalid, the plaintiff sought leave to serve the pleadings outside of British Columbia pursuant to rule 13(3) on the basis that the court had jurisdiction over the proceeding because there was a real and substantial connection between the court and the litigation. The plaintiff also submitted that the test of forum conveniens was satisfied.

The British Columbia Supreme Court, in a decision reported in 22 B.C.T.C. 39, held that the breach of contract, which was the failure to effect the transfer of the shares, occurred outside of British Columbia and the plaintiff therefore could not rely on rule 13(1)(g). However, the court held that there was a real and substantial connection between the cause of action and British Columbia such that the court had jurisdiction over the matter and that the defendants had not established that there was a more convenient and appropriate forum in the United States. Therefore, the plaintiff was granted leave to serve the writ of summons and statement of claim ex juris on the defendants pursuant to rule 13(3). The defendants appealed. The plaintiff cross-appealed.

The British Columbia Court of Appeal, Esson, J.A., dissenting, dismissed the appeal.

Conflict of Laws - Topic 1162

Service out of jurisdiction - Contracts - What constitutes the appropriate or convenient forum - A B.C. company sued the defendant U.S. companies in British Columbia for breach of a share purchase contract by telephone and confirmed by fax - No defendants were physically present in Canada - Although the breach (failure to effect a transfer of the shares) did not occur in B.C., the damages were sustained there - Proceeding by way of summary trial in B.C. would save costs and provide minimal inconvenience to the defendants' witnesses since evidence would be by affidavit - The British Columbia Court of Appeal affirmed that the U.S. forum was not more convenient and the plaintiff's choice of forum should be allowed - See paragraphs 23 to 26.

Conflict of Laws - Topic 1163

Service out of jurisdiction - Contracts - Breach of contract - The plaintiff, a B.C. company, sued the defendant U.S. companies in British Columbia for breach of a contract for the purchase of corporate shares by telephone and confirmed by fax - None of the defendants had a physical presence in Canada - The breach was the failure to effect a transfer of the shares - The British Columbia Court of Appeal affirmed that the damages were sustained in British Columbia, which resulted in a real and substantial connection between the cause of action and B.C. - Accordingly, the B.C. court had jurisdiction simpliciter under rule 13(3) to grant leave for service ex juris - See paragraphs 10 to 22.

Conflict of Laws - Topic 1663

Actions - General - Forum conveniens - Plaintiff's right to select the forum - [See Conflict of Laws - Topic 1162 ].

Conflict of Laws - Topic 7283

Contracts - Jurisdiction - Where cause of action arises - [See Conflict of Laws - Topic 1163 ].

Conflict of Laws - Topic 7284

Contracts - Jurisdiction - Forum conveniens - [See Conflict of Laws - Topic 1162 ].

Practice - Topic 2558

Service - Service of notice, writ or statement of claim out of jurisdiction - Consideration by court of forum conveniens - [See Conflict of Laws - Topic 1162].

Cases Noticed:

Cook et al v. Parcel, Mauro, Hulton & Spaanstra, P.C. (1997), 87 B.C.A.C. 97; 143 W.A.C. 97; 31 B.C.L.R.(3d) 24 (C.A.), consd. [para. 12].

Tolofson v. Jensen and Tolofson, [1994] 3 S.C.R. 1022; 175 N.R. 161; 77 O.A.C. 81; 51 B.C.A.C. 241; 84 W.A.C. 241, refd to. [para. 12].

Canadian International Marketing Distributing Inc. v. Nitsuko et al. (1991), 56 B.C.L.R.(2d) 130 (C.A.), consd. [para. 13].

Morguard Investments Ltd. et al. v. De Savoye, [1990] 3 S.C.R. 1077; 122 N.R. 81; [1991] 2 W.W.R. 217; 76 D.L.R.(4th) 256; 52 B.C.L.R.(2d) 160, refd to. [para. 15].

Ell v. Con-Pro Industries Ltd. and Kowalsky (1992), 11 B.C.A.C. 174; 22 W.A.C. 174 (C.A.), consd. [para. 17].

Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.), [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1; 102 D.L.R.(4th) 96; 77 B.C.L.R.(2d) 62, refd to. [para. 20].

Oppenheimer v. Sperling (1899), 7 B.C.R. 96 (S.C.), consd. [para. 31].

Smith and Osberg Ltd. v. Hollenbeck, [1939] 2 W.W.R. 652; 54 B.C.R. 141 (C.A.), consd. [para. 32].

Mutzenbecher v. La Aseguradora Espanola, [1906] 1 K.B. 254; 75 L.J.K.B. 172 (C.A.), refd to. [para. 32].

Canadian International Marketing Distributing Ltd. v. Nitsuko Ltd. et al. (1990), 56 B.C.L.R.(2d) 130 (C.A.), consd. [para. 33].

Statutes Noticed:

Rules of Court (B.C.), Supreme Court Rules, rule 13(3) [para. 11].

Counsel:

Timothy J. Delaney, for the defendants/appellants;

Edward G. Wong, for the plaintiff/respondent.

This appeal was heard before Esson, Mackenzie and Proudfoot, JJ.A., of the British Columbia Court of Appeal, at Vancouver, British Columbia, on November 6, 2000. The decision of the court was delivered on November 23, 2000, when the following opinions were filed:

Mackenzie, J.A. (Proudfoot, J.A., concurring) - see paragraphs 1 to 27;

Esson, J.A., dissenting - see paragraphs 28 to 39.